Welfare Effects of Uzbekistan's Foreign Exchange Regime

International Monetary Fund

No 2000/061, IMF Working Papers from International Monetary Fund

Abstract: In addition to transferring about 16 percent of GDP from exporters to importers, Uzbekistan’s quasi-fiscal multiple exchange rate regime generates identifiable welfare losses of 2-8 percent of GDP on import markets and up to 15 percent on export markets. These excess burdens have increased substantially with the growing difference of exchange rates. The welfare analysis allows some conclusions regarding the optimal reform strategy: (i) welfare losses will decline overproportionally as exchange rates unify; (ii) exchange rate unification should be supplemented by changing the explicit fiscal system; (iii) at a minimum, Uzbekistan would benefit from moving to an explicit fiscal regime.

Keywords: WP; exchange rate; market; export; rate; Multiple Exchange Rates; Welfare Analysis; Quasi-Fiscal Operations; Uzbekistan; U.S. dollar; welfare loss; curb market premium; foreign exchange regime; import market; clearing exchange rate; Exchange rates; Exports; Market exchange rates (search for similar items in EconPapers)
Pages: 23
Date: 2000-03-01
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Citations: View citations in EconPapers (4)

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